Retirement Plans & Where to Start
Lesson 8 from: FAST CLASS: How to Retire Early: The Latte FactorDavid Bach
Retirement Plans & Where to Start
Lesson 8 from: FAST CLASS: How to Retire Early: The Latte FactorDavid Bach
Lessons
Financial Education - Know Better To Do Better
15:12 2Start Early, Start Today
07:02 3The Latte Factor: How It Works
16:31 4FITE - Financial Independence to Transition Early
04:39 5Common Investment Mistakes
01:29 6Becoming Rich on an Ordinary Income
04:04 7How Much do You Need to Retire
01:47 8Retirement Plans & Where to Start
05:23Lesson Info
Retirement Plans & Where to Start
these are the different amounts of money that you can put away today in retirement accounts. So we're gonna go through quickly iras 41 K. Plans set fire is sold for one K. Plans. This is the numbers now. Red stands for under age 50. Black stands for over age 50 because of your older. There's a catch up provision. All of that is tax deductible. So I raised from K. Plans. That's how much you can put away question number one on a 41 K. Plan. If you got one, are you enrolled? Number one thing you need to do is be enrolled. You need to use it. You need to max it out under age 50 under age 50, it's $19,000. I want you saving an hour to have your income ideally I want you maxing it out. I want you being obsessed with saving. You can't really over save and invest. You can always tap the money later. I don't want you to I want you to leave it there, I don't want to borrow from it but you gotta maxis plans out. Second thing is if you're self employed you need to open up a sep ira. So self employ...
ed retirement account It takes 10 minutes to open up a self employed retirement account. All of you watching your self employed, you can save 25% of your gross income up to $56,000. Last time I did this class people gave me lots of questions. Where do I get a set by r a every major brokerage firm I'm gonna list them here in a second, has a set by ira, you can open them up in minutes online. You can also do what's called a solo 41K plan. If you have a spouse member, it's just two of you. This is a great plan, you can put even the same amount of money ultimately maximum wise, but you can cram more money into these plans for the lower income. So like as an example, you could make $50,000 as a side business And you could actually get $30,000 put away tax deductible and someone's going, wow. Yeah, a lot of employees have side businesses. If your side business is used for 10 years to fund a retirement account and you don't pay taxes on that money. It's all legal, you can get rich a lot faster. These are the places that you can go. These are the four largest financial service companies that you can go to at any moment online. Ameritrade Schwab Vanguard Fidelity, you can do it yourself or you can hire an R. A. A. Fiduciary to work with you. Yeah, there are other firms, there are robo advisors, Personal capital acorns. Some of you are using personal capital right now is your dashboard to track where your money is going, all your investments. They have probably one of the best dashboards. You can use acorns we talked about in the previous episode. Fantastic app. You can use the same small amounts of money. There's more, there's well front another great firm, there's betterment, these are all the new robo advisors that make diversifying your portfolio online Without an advisor. Very simple. I'm a big believer in working with financial advisors, but often people don't hire a financial advisor until they have about a quarter of $1 million dollars in savings and they're ready to retire. So as you're in the wealth accumulation phase, these can be great services for you to consider to use. If I were to summarize, I would go back to earlier, I showed you on that big white board, you're gonna work 90, hours You got a 25-35 year career on average to save money. It is decades, not days and the time to start is now. Now I know that some of the questions are coming in that I haven't asked yet is what about ross? What about Roth ira, Should I use a Roth Ira or should use a Roth 41 K plan. These didn't exist 15 years ago. So all the retirement accounts I showed you earlier tax deductible, you put a dollar in, you don't pay taxes on it. Money grows tax deferred when you go to take it out, you have to pay taxes on it a Roth ira, the money goes in after tax but it grows tax free and it comes out tax frame, all things being equal you have to choose. Do you want one or the other or do you do both? Which do I like? I personally like the tax deductible one because I just don't want to pay taxes as long as I can possibly not pay taxes. So I put all my money in tax deductible retirement accounts. I started with that $2000 ira account. I went to a 41 K. Plan, then I had a set fire a banana sold for one K. Plan. Then I had a defined benefit plan, I've done them all. I actually don't qualify for a Roth ira my income is too high because there's a limit, certain income you can't not everybody qualifies for Roth Ira account you can go to IRS dot gov and look at the limitations and every year the updates because depending on what year you watch this all this advice is timeless. But the laws change every year a lot of people have Roth foreign K. Plans. I recommend if you are young and you can get yourself to save the same amount of money in a Roth that you wouldn't a deductible Ira account then God bless you go forward and put it in a Roth